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In the wake of Hurricanes Harvey and Irma, Nydia M. Velázquez (D-NY) is pressing the Small Business Administration (SBA) on a program that was intended to provide disaster relief, but that has stalled in its implementation since its 2015 enactment. 

“Following Sandy, Congress appropriately created this program to channel assistance to disaster survivors in a rapid fashion,” said Velázquez who is the top Democrat on the House Small Business Committee. “Now, as much of the southern U.S., Puerto Rico and the Virgin Islands are reeling to respond and recover, we are seeing SBA hasn’t taken the steps to get this initiative up and running.  We need answers from SBA as to why.”

The Recovery Opportunity Loan Program was created under the Recovery Improvements for Small Entities After Disaster Act of 2015 (RISE Act) and would provide loans of up to $150,000 to disaster survivors from private lenders. With a 2016 deadline to begin the program, the Small Business Administration (SBA) has not yet released information on program regulations, nor has SBA provided an update on its status. 

“After disasters, time and again, we’ve seen that the speed with which entrepreneurs can access emergency credit makes the difference between remaining in business or shutting their doors and putting Americans out of work,” said Velázquez.  “We always need SBA to operate effectively, but this is especially true when it comes to catastrophes and disaster lending.  It is troubling that the agency hasn’t taken the steps necessary to put in place this additional tool for providing emergency access to capital.” 

SBA does provide other low-interest loans to businesses, non-profit organizations, homeowners and renters in periods following a natural disaster. The Recovery Opportunity Loan Program would complement such existing efforts by further assisting businesses struggling to rebuild after disaster. 

A full text of the letter is below. For a PDF, click here. 

September 18, 2017

The Honorable Linda McMahon

Administrator

U.S. Small Business Administration

409 3rd Street, SW

Washington, DC 20416

Dear Administrator McMahon:

As you know in recent weeks, our country has experienced unprecedented natural disasters in the form of Hurricanes Harvey and Irma.  Our federal government must utilize all methods available to ensure it is helping citizens quickly recover from these disasters. 

The Recovery Improvements for Small Entities After Disaster Act of 2015 (RISE Act) created the Recovery Opportunity Loan Program under SBA Express which would provide loans up to $150,000 to disaster survivors from private lenders. Section 2106 required SBA to promulgate rules to carry out this loan program no later than 270 days after enactment of the RISE Act—by August 21, 2016. 

An SBA notice from August 2016 indicated the agency’s intent to issue regulations, however they have yet to be promulgated. According to SBA’s FY 2018 Congressional Budget Justification, regulations are scheduled to be issued by September 30, 2018, over two years after the required timeframe. 

Given the importance of providing small businesses and homeowners such assistance post-disaster, I am writing to request information on the status of the regulations. Please provide an explanation on why the regulations have yet to be promulgated, an updated timeframe for promulgation, and details on the number of staff and resources devoted to this effort.

I look forward to your timely response.

Sincerely,

Nydia M. Velázquez

Ranking Member

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